Chipmaker Nvidia Strikes AI Gold

could produce ever more advanced and stylish computer game graphics.

“Their original use for graphics on video games was repurposed for AI at an early stage in the demand boom, and that’s a very tough situation to replicate for other firms,” said Lund-Yates.

Over the past 15 years, Nvidia has become the main provider of high-performance chips for artificial intelligence. It now holds around 80% of the global market for such chips.

It has also invested in two areas that are key to artificial intelligence: advanced networking and software. Advanced networking allows chips to be used in multiple ways at once while CUDA, Nvidia’s AI software platform, has proven popular.

Big Beasts Loom
Nvidia’s gold-plated place at the top of the artificial intelligence tree means it is likely to continue to benefit from the surge in interest in the sector.

“Companies don’t want to be left behind in the AI revolution, and even though times are tighter, they are ring-fencing budgets to invest in future AI capabilities, even though the full possibilities of the tech is still hard to map,” said Streeter, who expects demand for Nvidia’s products to grow and grow.

Although it remains far from clear how the current wave of interest in artificial intelligence will ultimately develop, other companies are keen to cash in as well. Semiconductor designers and makers are the most obvious potential beneficiaries of a sustained boom.

Earlier this month, semiconductor firm AMD announced it was planning to release its own artificial intelligence chips, known as MI300, by the end of 2023. The chips are designed to compete with Nvidia’s H100 chips.

Then there are several smaller players such as Cerebras and SambaNova who are hoping to develop the next big thing in artificial intelligence chip technology.

It’s certainly not just smaller startups who are hoping to get a slice of the pie currently being enjoyed by Nvidia. Tech behemoths Google, Amazon and Microsoft are all racing to develop their own artificial intelligence chips.

This week, Google announced a slew of new artificial intelligence investments, including details of its own new custom-built chips.

Earlier this year, US media reports said Microsoft was working on its own AI chips to avoid being too reliant on Nvidia. Internal Microsoft documents, released during a Federal Trade Commission lawsuit against the firm in 2022, said Microsoft was working on a “first-class silicon chip to underpin our cloud and AI efforts.”

Meanwhile, Amazon has made no secret of its attempts to develop AI chips. “I think that we’re in a better position than anybody else on Earth to supply the capacity that our customers collectively are going to want,” Amazon Web Services CEO Adam Selipsky told CNBC in June.

“There is the potential for others to catch up and gain a big slice of the market,” said Streeter.

She also pointed to other potential challenges, such as huge demand putting a strain on Nvidia’s supply chains. That, as well as the intense rivalry between the US and China on semiconductors, could lead to some volatility in the years ahead.

For now though, Nvidia is better placed than any other firm to ride the wave.

Arthur Sullivan is a Berlin based Journalist and producer — @dwnews  among others. Thee article was edited by Ashutosh Pandeyis, and it is published courtesy of Deutsche Welle (DW).